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Goldman Sachs' profits mask revenue decline
Goldman Sachs' 1Q net income more than doubles, but the gain masks a revenue decline
By The Associated Press

NEW YORK (AP) ' Goldman Sachs more than doubled its first-quarter profits and announced plans to raise its dividend Monday.

The strong results masked other problems, including a 16 percent decline in revenue. To make up for that, and to propel earnings higher, Goldman turned to cost-cutting.

The storied investment bank slashed 3,000 workers over the year, or about 8 percent of its work force. It cut back on salaries, trimmed occupancy costs and paid less in brokerage fees, cutting total expenses by 14 percent.

Revenue from financial advising, where the bank advises big companies and investors on mergers and acquisitions, was one of the few areas to record a revenue gain, 37 percent.

Revenue from underwriting stock and bond sales fell 27 percent. Revenue from trading fell 14 percent, hurt by lower fees and revenue from the division that trades bonds, currencies and commodities. Total revenue fell to $9.9 billion from $11.9 billion, though that beat the $9.4 billion that analysts polled by FactSet had been expecting.

Goldman Sachs said its net income available to common shareholders rose to $2.1 billion, or $3.92 per share. That was a jump of about 128 percent from $908 million, or $1.56 per share, a year ago. The per-share earnings also beat expectations of analysts, who had been predicting $3.52.

The bank also announced it would raise its quarterly shareholder dividend to 46 cents per share from 35 cents. Though the bank didn't say so, that's a particular sign of strength in the current market, because it's also a reminder that Goldman, unlike some of its peers, got permission to do so after passing the government's most recent round of stress tests.

CEO Lloyd Blankfeink called the quarter a "solid performance." In a prepared statement, he noted that "client activity remains relatively low in certain areas," but said that "our mix of businesses gives the firm significant room for revenue growth as economic and market conditions continue to improve."

Goldman Sachs' stock fell slightly in pre-market trading, down 73 cents to $117.

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